Bombay High Court
M/S. ULTRA DISTRIBUTORS PVT. LTD.versusM/S. dHARIWAL FILMS PVT. LTD. AND 2 ORS.
- Decided
- Disposal
- DISPOSED OFF
Holding
The Court held that the 31 March 2005 assignment was valid and exclusive, Defendant No.1 breached it by failing to deliver acceptable Digibeta masters, and Defendant No.2 failed to establish a superior title, warranting damages, punitive damages and an injunction in favour of the Plaintiff.
Summary
The plaintiff, Ultra Distributors Pvt. Ltd., claimed that Dhariwal Films Pvt. Ltd. (Defendant No.1) validly assigned video, cable TV and video‑on‑demand rights in the film “Nehle Pe Dehla” to it on 31 March 2005, and that Defendant No.1 failed to deliver acceptable Digibeta master tapes, thereby breaching the agreement. The plaintiff sought a declaration of exclusive ownership, damages, punitive damages and an injunction against Defendants No.1, 2 and 3. The court found that the 2005 assignment was indeed valid and binding, that Defendant No.1 did not provide master tapes of exploitable quality and thus breached the contract, and that Defendant No.2 could not establish a superior chain of title. Consequently, the court declared the plaintiff’s rights exclusive, awarded compensatory damages of Rs 1,66,75,000, punitive damages of Rs 25,00,000, and costs, and ordered a permanent injunction against the defendants.
Issues considered
- Whether the Plaintiff proves that by an Agreement dated 31‑03‑2005, Defendant No.1 assigned the video rights and other rights in the film “Nehle Pe Dehla” to the Plaintiff.
- Whether the Plaintiff proves that the Agreement dated 31‑03‑2005 is valid, legal and binding.
- Whether Defendant No.1 delivered the Digibeta master tapes of exploitable quality as required by the Agreement.
- Whether the Plaintiff is entitled to a refund of Rs 10,01,000 paid under the Agreement.
- Whether the Plaintiff is entitled to damages from Defendant No.1.
- Whether Defendant No.2 is the sole and exclusive distributor and copyright holder of the film’s video rights in India, Nepal and Bhutan.
- Whether Defendant No.2 proved a prior assignment of video copyrights dated 30‑05‑2002 and 28‑08‑2002.
- Whether Defendant No.2 proves that the Plaintiff’s Assignment is void, illegal, untenable and bad in law.
- What reliefs are appropriate.
- What order should be made.
Subjects
- copyright assignment
- video rights
- breach of contract
- damages
- punitive damages
- injunction
- intellectual property
- commercial IP suit
- evidence admissibility
- contractual performance
Judgment
1-COMIP-26-2007
Digitally
signed by
VAIBHAV
VAIBHAV NAMDEV
NAMDEV BARE
BARE Date:
2026.08.31
18:55:54
+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL IP SUIT NO. 26 OF 2007
Ultra Distributors Pvt. Ltd. … Plaintiff
Versus
M/s. Dhariwal Films Pvt. Ltd. and 2 Ors. … Defendants
——
Mr. Rashmin Khandekar a/w. Mr. Pranav Nair, Ms. Jyoti Ghag, Mr. Shailesh
Prajapati i/b. Dua Associates for the Plaintiff.
Mr. Amit Dubey a/w. Mr. Abdullah Shaikh i/b Mr. Ashok M. Saraogi for
Defendant No. 1.
Mr. Ashok Singh for Defendant No. 2.
Mr. Himanshu Choudhary, Authorised person on behalf of Defendant No. 3,
present in the Court.
——
CORAM : ARIF S. DOCTOR, J.
RESERVED ON : 20th APRIL 2026
PRONOUNCED ON : 29th AUGUST 2026
JUDGMENT:
1. The dispute in the present Suit concerns the assignment of video copyrights
in respect of the feature film titled “Nehle Pe Dehla” (the “said Film").
2. The case of the Plaintiff is that in the year 2005, Defendant No. 1 had
approached the Plaintiff, offering to assign video rights in the said Film to
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the Plaintiff. Also, Defendant No. 1 had, at that time, informed the Plaintiff,
of a previous assignment made by Defendant No. 1 in respect of the video
copyrights in the said Film to one M/s. Showman Export (I) Pvt. Ltd.
(“Showman”). Defendant No. 1, however, represented that the assignment
in favour of Showman was cancelled by a writing dated 25 th November
2002.
3. Thereafter, Defendant No. 1 executed an Assignment Agreement dated 31st
March 2005 (“Plaintiff’s Assignment”), under which Defendant No. 1
assigned the video rights in the said Film to the Plaintiff for a period of
eight years, for a total consideration of Rs.42,51,000/-, payable in the
manner stipulated therein. It is not in dispute that, pursuant to the Plaintiff’s
Agreement, the Plaintiff paid a sum of Rs.10,01,000/- to Defendant No. 1.
4. Defendant No. 1, on the other hand, contends that the Plaintiff was aware
of the prior assignment in favour of Showman and, despite the assignment
in favour of Showman, proceeded to enter into the Plaintiff’s Assignment.
5. Defendant No. 2, who is also engaged in the production and distribution of
VCDs and DVDs of films, has claimed a valid assignment of the video
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copyrights in the said Film, and has set up a competing claim towards the
same. It is the case of Defendant No. 2 that the video copyrights in the said
Film were assigned to Defendant No. 2 under an Assignment Agreement
dated 30th May 2002. It is also the case of Defendant No. 2 that the
assignment in its favour was subsequently confirmed by Defendant No. 1,
by executing a Deed of Assignment dated 28 th August 2002. It is not in
dispute that the tenure of this assignment has come to an end by efflux of
time, the assignment being for eight years.
6. It is the Plaintiff’s case that Defendant No. 1 has acted in breach of the
terms of the Plaintiff’s Assignment, as Defendant No. 1 did not provide the
Plaintiff with the Digibeta Master tapes of the said Film, of acceptable
quality within the stipulated time under the Plaintiff’s Assignment
Agreement. Defendant No. 1 instead, permitted Defendant No. 2 to exploit
the video rights in the said Film even though they were assigned to the
Plaintiff.
7. It is thus that the present Suit was filed in which the Plaintiff has sought
the following reliefs:
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(a) that this Hon'ble Court may be pleased to declare that the Agreement dated
31st March 2005 entered into between the Plaintiffs and Defendant No.1
is valid and binding and the Plaintiffs are the sole and exclusive copyright
holders with regard to video rights, cable TV rights including video on
demand rights of the film 'Nehle Pe Dehla' in any language, format,
versions for exhibition, exploitation, distribution and multiple telecast all
over India, Nepal and Bhutan;
(b) that the alleged agreement dated 28th August 2002 executed between
Defendant No.1 and Defendant No.2 is void and illegal and
unenforceable, as well as any agreement entered into between
Defendant No.3 and Defendant No.1 with respect to the above rights
granted to the Plaintiffs by agreement dated 31 March 2005;
(B-1) The Defendant No. 1 be ordered and directed to refund to the Plaintiff
a sum of Rs. 10,01,000/- being the amount paid by the Plaintiff under the
Agreement dated 31 March 2005.
(B-2) The Defendant No. 1 be ordered and directed to pay to the Plaintiff a
sum of Rs. 1,66,75,000/- as by way of damages more particularly
described in the particulars of claim annexed as Exhibit "AG" along with
18% interest from the date of amendment the Suit till realisation.
(c) that this Hon'ble Court restrain the Defendant Nos. 1, 2, and 3 their
partners and/or proprietors, their assignees, servants and agents,
distributors and retailers by an order of permanent injunction from
dealing with in any manner, assigning, reproducing, recording, printing,
processing, copying on any video format i.e. Videograms, cassettes,
discs, tapes etc. or any other format thereinafter invented or discovered
and from selling, offering for sale, storing, distributing, advertising
directly or indirectly in respect of the said film "Nehle Pe Dehla";
(d) For interim and ad-interim reliefs in terms of prayer clause (c) above;
(e) Cost of the suit be provided for;
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(f) Any further order as this Hon'ble Court may deem fit and proper in the
facts and circumstances of the case may require;”
8. On 22nd February 2007, Defendant No. 2 similarly instituted Suit No. 542
of 2007, seeking, inter alia, a declaration that it was the exclusive
distributor and owner of the copyrights in the said Film. The said Suit was
subsequently renumbered as Commercial IP Suit No. 20 of 2007 and was,
by an Order dated 5th September 2008, tagged along with the present Suit,
with a direction that both Suits be heard together.
9. The present Suit was contested by both Defendant Nos. 1 and 2, who filed
their respective Written Statements. Defendant No. 3, though served, chose
not to contest the Suit, and the Suit as against Defendant No. 3 was, vide
an order dated 2nd February 2010, transferred to the list of undefended suits.
10.By an order dated 23rd April 2013, this Court framed the following issues:
ISSUES
(1) Whether the Plaintiff proves that by an Agreement dated 31-03-
-2005, the Defendant No.1 has assigned the video rights and other
rights as set out therein in the film “Nehle Pe Dehla” to the
Plaintiff?
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(2) Whether the Plaintiff proves that the aforesaid Agreement dated 31--
03--2005 is valid, legal and binding ?
(3) Whether the Defendant No.1 had delivered the desired betamasters
tape to the Plaintiff in exploitable quality as per the aforesaid
Agreement ?
(4) Whether the Plaintiff proves that it is entitled to a refund of
Rs.10,01,000/- being the amount paid by it under the Agreement
dated 31--03--2005 ?
(5) Whether the Plaintiff proves that it is entitled for damages from
Defendant No.1?
(6) Whether the Defendant No.2 are the sole and exclusive distributors
and have copyright with regard to the Film “Nehle Pe Dehla” in
relation to Video rights, cable TV rights in all format including
VCD and/or DVD and have exclusive entitlement for exhibition,
exploitation and telecast in relation to aforesaid rights in the
Territory of India, Nepal and Bhutan ?
(7) Whether the Defendant No.2 made a prior Assignment (30-05--2002
and 28--08-2002) deed acquired video copyright of the film “Nehle
Pe Dehla” for consideration and became owner of video copyright
of the film “Nehle Pe Dehla” ?
(8) Whether the Defendant No.2 proves that the Agreement dated 31-
-03--2005 executed between Plaintiff and Defendant No.1 is void,
illegal, untenable and bad in law?
(9) What Reliefs?
(10) What Order?
11.Following this, the evidence was led by the parties. The Plaintiff led the
evidence of Mr. Neelkanth Banarjee (PW-1), as well as Mr. Sushil Kumar
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Agrawal (PW-2), and Defendant No. 2 led the evidence of Mr. Ajeet Kohli
(DW2-1).
12.This Court, by an Order dated 20th April 2026, noted that the tenure of the
Agreement under which Defendant No. 2 was asserting rights in the
Commercial IP Suit No. 20 of 2007 had come to an end and accordingly
dismissed the Commercial IP Suit No. 20 of 2007, observing that nothing
survived for adjudication in the said Suit.
Submissions on Behalf of the Plaintiff:
13.Mr. Khandekar, Learned Counsel appearing on behalf of the Plaintiff,
while dealing with Issue Nos. 1 and 2, at the outset, submitted that
Defendant No. 1 had assigned to the Plaintiff, the video rights and cable
television rights, including video-on-demand rights, in respect of the said
film for exploitation in India, Nepal and Bhutan.
14.He then submitted that the Plaintiff’s Assignment was for a period of eight
years commencing from the date of (i) delivery of Digibeta Masters of
acceptable quality or (ii) the video release of the said film, for a total
consideration of Rs.42,51,000/-. He submitted that the Plaintiff had, in
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accordance with Schedule I of the Plaintiff’s Assignment, paid Defendant
No. 1, an amount of Rs.7,51,000/- on execution of the Plaintiff’s
Assignment and a further sum of Rs.2,50,000/-. He thus submitted that the
Plaintiff had paid Defendant No. 1 an amount of Rs.10,01,000/- under the
Plaintiff’s Assignment.
15.Mr. Khandekar pointed out that the Plaintiff had also issued a public notice
after having entered into the Plaintiff's Assignment. He submitted that
Defendant No. 2, in response to the public notice, had falsely claimed prior
and competing rights in respect of the said film. He then referred to the
correspondence exchanged between the Plaintiff and Defendant No. 2, in
which both parties asserted competing rights over the said film. He
submitted that Defendant No. 1, contrary to the representations made to the
Plaintiff, had also supported the claim of Defendant No. 2.
16.Mr. Khandekar submitted that although Defendant No. 1 had denied the
Plaintiff’s case in its Written Statement, Defendant No. 1 had
contemporaneously accepted that Defendant No. 1 had created rights in
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favour of the Plaintiff in the said film. This, he submitted, was evident from
the following:
i. The Written Statement dated 6th May 2007, filed by Defendant No. 1
in Com(IP) Suit No. 20 of 2007, in which Defendant No. 1 had
pleaded as follows:
“3. Without prejudice to what is stated hereinabove, these
Defendants submit that by filing the present suit, the Plaintiffs
hereinabove have played fraud upon this Hon’ble Court. These
Defendants submit that records of this Hon’ble Court in respect of
the present suit as well as the suit filed by M/s. Ultra Distributors
Pvt. Ltd. would show that no orders were passed in favour of the
present Plaintiff and it was very much brought to the notice of the
present Plaintiffs that the rights in respect of the film in question
are with M/s. Ultra Distributors Pvt. Ltd. and well within their
knowledge, Defendant No. 1 had delivered necessary
print/cassette to the said M/s. Ultra Distributors Pvt. Ltd. and had
categorically brought to the notice of the Hon’ble Court that the
present Plaintiffs do not hold any right in respect of the film in
question and despite the same, behind the back of these
Defendants the Plaintiff had circulated Video CDs and cassettes
in respect of the film in question in the market. ..”
(emphasis supplied)
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ii. The Affidavit in Reply filed by Defendant No. 1 to Notice of Motion
No. 752 of 2007 in Suit No. 20 of 2007, in which Defendant No. 1 had
on oath stated as follows:
“3. (d) With reference to paragraph nos. 2-B and C of the said
Plaint, I say that at no point of time, the said M/s. Showman
Exports (India) Pvt. Ltd. had a right to assign the rights of the said
film in favour of any such third-party, the question of they having
assigned the rights in favour of present Plaintiff, does not arise. I
say that otherwise also, the said rights could not have been
assigned by the said M/s. Showman Exports (India) Pvt. Ltd.
without prior consent of the original Producers Mr. Mahendra
Dhariwal, who had been the Financer of the said film”
“3. (e) … I say that the whole intention of the Plaintiff seems to be
to avoid making payment of the legitimate dues in respect of
Music-Rights; and as also to grab the Video Rights without any
consideration by depriving M/s. Ultra Distributors Pvt. Ltd. from
enjoying the said rights who are lawfully holding the said rights
and with whom, necessary Consent Terms have also been filed
before this Hon’ble Court in a Suit filed by them. ..”
“ 3. (H) With reference to paragraph No. 2-G of the Plaint, it is
true that the Plaintiffs are holding audio rights in respect of the
said film. However, they are no way concerned with the Video
Rights of the said film. …” (emphasis supplied)
iii. Consent Terms executed between the Plaintiff and Defendant No. 1,
which, inter alia, recorded as follows:
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“1. Agreed, declared and confirmed by the Plaintiffs and
defendant No.1 that the Agreement of Assignment dated 31st
March 2005 assigning Video copyrights, Cable TV Rights
including video on demand rights and other allied rights executed
by the Defendant No.1 in favour of the Plaintiffs is binding, valid
and subsisting.
2. The Defendant No.1 acknowledges receipt of payment from the
Plaintiffs of an amount of Rs. 10,01,000/-(Rupees Ten Lacs One
Thousand Only) towards the aforesaid assignment granted by the
Defendant No.1 to the Plaintiffs being Part Payment under the
said Agreement of Assignment dated 31st March 2005.)
3. Agreed, declared and confirmed that the Plaintiffs are the
lawful copyright holders for enjoyment of video copyrights and
cable TV rights including video on demand and other allied rights
in respect of the film titled "Nehle Pe Dehla" starring Sanjay
Dutta, Saif Ali Khan, Bipasa Basu, etc. in terms of the said
Agreement dated 31st March 2005 at Exhibit "A" to the Plaint.”
(emphasis supplied)
iv. The questions were put to DW1 by Learned Counsel for Defendant No.
1, which show that Defendant No. 1 had admitted that the Consent
Terms were entered into and that the Plaintiff's Assignment Agreement
was valid.
“Q. 3. Are you aware of that the Notice of Motion in Suit No. 155
of 2007 between Ultra Distributors and Dhariwal Films had been
settled?
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A. I do not remember.
Q. 4. I put it to you that it is well within your knowledge as per the
Consent Terms filed in Suit No. 155 of 2007 that Ultra Distributors
was entitled to get the delivery of beta tapes of the said films?
A. I deny your suggestion
Q. 11 I put it to you that from the beginning of the case you are
aware that there is already Agreement entered between Dhariwal
Films and Ultra Distributors on 31st March 2005?
A. I accept. ” (emphasis supplied)
17.Mr. Khandekar submitted that although the Consent Terms were never
filed and the parties did not ultimately act upon them, the same were signed
by both the parties and Defendant No. 1 had, in Clause 1, nonetheless,
categorically admitted and confirmed that the Plaintiff’s Assignment
Agreement was valid and binding. He therefore submitted that the video
rights to the film had clearly been assigned to the Plaintiff and that the
Plaintiff’s Assignment Agreement was valid, binding and complete. He
thus submitted that Issue Nos. 1 and 2 ought to be answered in the
affirmative.
18.Mr. Khandekar, then in dealing with Issue No. 3, submitted that it was the
Plaintiff’s specific case that the Digibeta tapes supplied by Defendant No.
1 to the Plaintiff were not of the quality contemplated under the Plaintiff’s
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Assignment Agreement. He submitted that this was specifically pleaded in
the Plaint as follows:
“28A. ... The Plaintiff submits that the Defendant no. 1 failed to provide
exploitable quality master on time to this Plaintiffs and allowed to
exploitation of the context rights by Defendant No. 2, and therefore the
VCD/DVD could not be released simultaneously and this has cause huge loss
to the Plaintiff to the extent of Rs. 1,66,75,000/- towards loss of profits and
others, as more particularly described in the Particulars of Claim annexed as
Exhibit “AG” hereto which the Plaintiff seeks to recover from Defendant
no.1” (emphasis supplied)
19.Mr. Khandekar was at pains to point out that Defendant No. 1 had not even
addressed the Plaintiff's specific case as pleaded in paragraph 28A as
extracted above, let alone having denied the same in the Written Statement.
He submitted that it was well settled that an assertion not denied in the
Written Statement is deemed to be accepted. He placed reliance upon the
decision of the Hon’ble Supreme Court in Thangam v. Navamani
Ammal1, to point out that Order VIII Rules 3 and 5 of the Civil Procedure
Code, 1908, requires a specific admission or denial of the pleadings in the
Plaint and that a general or evasive denial does not suffice. He therefore
1 (2024) 4 SCC 247.
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submitted that the Plaintiff’s positive case that Defendant No. 1 had not
supplied the Plaintiff with the Digibeta Master tapes of acceptable quality
was accepted by Defendant No. 1 for want of non-traverse.
20.He further submitted that Defendant No. 1’s failure to deliver Digibeta
Masters of acceptable quality was also borne out by the fact that, even after
the Consent Terms were executed, Defendant No. 1 had not delivered the
same as contemplated under those Consent Terms. He pointed out that the
Plaintiff had even handed over certain cheques to M/s. Jhangiani Narula &
Associates, which were to be handed over to Defendant No. 1 upon
delivery of acceptable quality Digibeta Masters. He submitted that the
tapes provided by Defendant No. 1 on 26th February 2007 were not of
acceptable quality, and the Plaintiff accordingly wrote to the then
advocates of Defendant No. 1, informing them that the new Digibeta
Masters were required before the cheques handed over to the advocates of
Defendant No. 1 could be released.
21.Mr. Khandekar therefore submitted that Defendant No. 1 had clearly
breached the obligations cast upon Defendant No. 1 in both the Plaintiff’s
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Assignment as also in the Consent Terms by failing to deliver Digibeta
Masters of acceptable quality to the Plaintiff. He submitted that the
evidence of PW-1 in this regard stood unimpeached. He then invited my
attention to the following answers given by PW-1 in cross-examination,
viz.
Q.21. I put it to you that since there is no delivery effected, the Plaintiff had
no occasion to make any grievance about quality of the material delivered?
A. I deny.
Q.22. Has the Plaintiff ever informed the Defendant No. 1 in writing that the
material delivered was not as per the required quality?
A. Yes, the Plaintiff has informed the Defendant No. 1.
…
Q.23. Can you point out from the compilation of the report prepared by the
technician employed by the Plaintiff referred to in Question No. 24 above?
A. No. It is not a part of the compilation.
Witness volunteers: We received the delivery of Digibeta, but the video quality
was not up to the mark for video release and an internal report to this effect
was created by the technician of the Plaintiff”
Basis the above, Mr. Khandekar submitted that the evidence of the Plaintiff
in support of the fact that the Digibeta Master tapes of the acceptable
quality were never delivered to the Plaintiff remained entirely
unimpeached.
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22.Mr. Khandekar also pointed out Question No. 21, which was put to PW-1
in cross-examination, which was a suggestion put by Counsel for
Defendant No. 1 that no delivery of the Digibeta tapes had in fact been
made. This he submitted was an admission on the part of Defendant No. 1
that the Digibeta Master tapes of acceptable quality had, infact, never been
handed over to the Plaintiff. He then, in support of his contention that the
suggestion put by Counsel for Defendant No. 1 to PW-1 in Question No.
21 would amount to an admission that no Digibeta tapes had infact been
supplied to the Plaintiff, placed reliance upon the decision of the Hon’ble
Supreme Court in Balu Sudam Khalde v. State of Maharashtra2 which he
pointed out held as follows:
“32. We noticed that in the cross-examination of the original first informant,
PW 1 Asgar Shaikh (Ext. 7), few suggestions were put to him by the defence
counsel. We quote the relevant part of the cross-examination of the first
informant:…
38. Thus, from the above it is evident that the suggestion made by the defence
counsel to a witness in the cross-examination if found to be incriminating in
nature in any manner would definitely bind the accused and the accused
cannot get away on the plea that his counsel had no implied authority to make
suggestions in the nature of admissions against his client.
2
(2023) 13 SCC 365.
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39. Any concession or admission of a fact by a defence counsel would
definitely be binding on his client, except the concession on the point of law.
As a legal proposition we cannot agree with the submission canvassed on
behalf of the appellants that an answer by a witness to a suggestion made by
the defence counsel in the cross-examination does not deserve any value or
utility if it incriminates the accused in any manner.” (emphasis supplied)
23.Basis the above, Mr. Khandekar submitted that there could be no doubt that
Defendant No. 1 had failed to deliver the Digibeta Master tapes to the
Plaintiff of the exploitable quality as required under the Assignment
Agreement. He thus submitted that Issue No. 3 should accordingly be
answered in the negative.
24.In dealing with Issue Nos. 4 and 5, Mr. Khandekar clarified that the
Plaintiff was not pressing for a refund of the monies paid by the Plaintiff
to Defendant No. 1. He then invited my attention to the Particulars of
Claim3 from which he pointed out that the Plaintiff had claimed
compensatory damages to the tune of Rs.1,66,75,000/-, as well as such
punitive damages as the Court may deem fit.
3 Exhibit “AG” annexed at page no. 136 to the Plaint.
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25.He then submitted that the Plaintiff was entitled to damages for the
following reasons:
i. The Plaintiff had duly proved its claim for damages by leading credible
oral evidence and producing documentary material evidencing the
expenditure incurred. The computation of damages by the Plaintiff’s
witness was based on the profits that were reasonably expected to be
earned from the exploitation of the said film, including the CD covers
that had already been printed. The Plaintiff also placed the said
printed CD covers on record in support of its claim.
ii. Defendant No. 1 did not challenge the testimony of the Plaintiff’s
witness on the issue of damages or the computation thereof. Indeed,
not a single question was put to the witness in cross-examination on
this aspect. Consequently, the Plaintiff’s evidence on damages was
unchallenged and must therefore be accepted.
iii. Defendant No. 1 also led no evidence to establish that the Plaintiff had
suffered any loss or that the loss was less than that claimed. Had the
film been less profitable, or had the Plaintiff’s loss been lower than
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alleged, Defendant No. 1 would reasonably have been expected to
lead evidence to that effect.
iv. Defendant No. 1 neither entered the witness box nor produced any
material that could assist the Court in assessing the quantum of
damages. Instead, it made every effort to evade the proceedings. On
the other hand, the Plaintiff made every endeavour, including through
the cross-examination of Defendant No. 2’s witness, to obtain records
reflecting the profits earned by Defendant No. 2 from the exploitation
of the rights in the said film.
v. Defendant No. 1 had admitted that the rights assigned to the Plaintiff
were worth at least Rs.82,51,000/-, which was the enhanced
consideration sought by Defendant No. 1 under the Consent Terms.
26.Mr. Khandekar then submitted that, as a starting point for estimating
damages, the Court could (i) take the amount of Rs.82,51,000/- as the
admitted value of the rights acknowledged in the Consent Terms; (ii)
deduct the balance consideration that would still have been payable by the
Plaintiff to Defendant No. 1 under the Assignment Agreement, being
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Rs.32,50,000/- (Rs.42,51,000/- being the total consideration less
Rs.10,01,000/- being the amount already paid) the amount of
Rs.50,01,000/- becomes the amount which the Plaintiff was deprived of;
and (iii) punitive damages of Rs.25,00,000/- on account of Defendant No.
1's conduct. He submitted that, on this basis, the Court could then proceed
to consider the damages as claimed in the Plaintiff.
27.Mr. Khandekar submitted that the Plaintiff had proved its case on damages,
as was evident from (i) the evidence of PW-1 and in particular what was
set out in paragraphs 45, 51 and 52 of the Affidavit of Examination-in-
Chief of PW-1; (ii) the evidence of PW-1 and in particular what was set
out in paragraph 9 of the Additional Affidavit of Examination-in-Chief of
PW-1; and (iii) the Examination-in-Chief of PW-2 in particular paragraphs
46, 53 and 54.
28.Mr. Khandekar then also pointed out that the Plaintiffs have expended
multiple amounts towards advertisement and publication of the said Film,
and the particulars of the same have been included in the particulars of
claims which are appended as Exhibit “AG” with the Plaint. He submitted
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that the evidence led by PW-1 and the documents such as (i) the receipt
from Glamour Photo Lab Pvt. Ltd. dated 21 st February 2007, (ii) the
invoice dated 15th March 2007 from Print Plus in regard to the covers of
the said film, and (iii) the inlay covers printed by the Plaintiff, which have
been annexed at Serial Nos. 50, 51 and 52 with the Affidavit of Documents
of the Plaintiff.
29.He then pointed out that Defendant No. 1 had not cross-examined the
Plaintiff's witnesses with regard to the Plaintiff's claim for damages and
that Defendant No. 1 had also not led any evidence. He thus submitted that
the Plaintiff's evidence on damages stood unimpeached. He placed reliance
upon the decisions in Arvind Singh v. State of Maharashtra4 and Union
of India v. Rashid M.H. Jung5 in support of his contention that evidence
in the absence of effective cross-examination or where such evidence
remains unchallenged should be accepted.
30.Mr. Khandekar submitted that, although the Plaintiff’s loss could not be
quantified with exactitude since Defendant No. 1 had failed to produce the
4 (2021) 11 SCC 1.
5 2017 SCC OnLine Del 10519.
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relevant documents, the Plaintiff was nevertheless entitled to damages
assessed on a reasonable estimate. He contended that such an estimate
could legitimately be made by drawing an adverse inference against
Defendant No. 1 for withholding the necessary documents and by
extrapolating from the limited financial material available on record. He
submitted that, once breach on the part of Defendant No. 1 was established,
the Plaintiff’s claim for damages could not be defeated merely because the
precise quantum of loss was incapable of proof. He submitted that proof of
breach gave rise to a presumption of loss, leaving the Court to determine
the quantum of damages on the basis of the material available. In support
of his contention that damages could be awarded upon establishment of a
breach of the Plaintiff’s Assignment, he relied upon the decision of this
Court in Mahanagar Gas Ltd. v. Babulal Uttamchand and Co.6 He also
relied upon the decision of the Hon’ble Supreme Court in Board of Control
for Cricket in India v. Kochi Cricket Private Limited7 to contend that,
where specific evidence of the loss occasioned by a breach is unavailable,
6 2012 SCC OnLine Bom 1254.
7 2025 SCC OnLine Bom 2378.
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1-COMIP-26-2007
the Court may resort to honest guesswork or “rough and ready methods”
to arrive at a reasonable estimate of damages.
31.He also submitted that, once it was shown that the Plaintiff had attempted
to prove its case and the Defendant had failed to produce relevant
documents, an adverse inference could be drawn against the Defendant. He
submitted that such adverse inference could be factored into the
computation of damages. In support of his contention, he placed reliance
on the decision of the Delhi High Court in Koninklijke Philips N.V. v.
MAJ (RETD) Sukesh Behl8, in which he pointed out that the Delhi High
Court, while dealing with a matter pertaining to the grant of damages
against the sales of replicated DVDs, had relied upon an estimate of 10,000
DVDs per stamper to guesstimate the actual damages caused due to such
replicated DVDs.
32.Mr. Khandekar also submitted that a Defendant's awareness of the loss
likely to be occasioned to the Plaintiff was also a relevant factor in the
computation of damages. In support of this contention, he placed reliance
8 2025 SCC OnLine Del 11121.
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1-COMIP-26-2007
upon the decision in the case of Bence Graphics International Ltd. v.
Fasson U.K. Ltd.9, which he pointed out held as follows, viz.
“The situation often arises where the buyer seeks to displace the presumption
and recover losses other than the diminution in value. Where a seller knows
that the buyer intended to resell the goods and ought reasonably to have
contemplated that a breach of his undertaking as to the description or condition
of goods would be not unlikely to cause the buyer to lose the profit he hoped to
make on the resale, or potential sub-sale, the buyer may recover damages in
respect of such loss of profits caused by a breach of the seller's undertaking.
…
In the present case there was no series or “string” of contracts. The same goods
were not sold on. Even so the string contract cases illustrate graphically how
the court is permitted to and will depart from the presumption in order to do
justice between the parties based on a finding of fact of what the parties
reasonably contemplated.” (emphasis supplied)
33.He placed reliance upon the decision in the Delhi High Court in the case of
Thyssen Krupp Materials AG v. Steel Authority of India10, to submit that
the rate in the contract which has been breached would also be relevant for
the contemplation of damages arising out of such breach.
9 [1998] QB 87.
10 2017 SCC OnLine Del 7997.
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1-COMIP-26-2007
34.Mr. Khandekar then submitted that in the present case the Court ought to
grant punitive damages even though they were not specifically pleaded
since the facts of the present case would warrant such grant. In support of
his contention, he placed reliance upon the decision in Organo Chemical
Industries v. Union of India11 which he pointed out held as follows:
“38. What do we mean by “damages”? The expression “damages” is neither
vague nor over-wide. It has more than one signification but the precise
import in a given context is not difficult to discern. A plurality of variants
stemming out of a core concept is seen in such words as actual damages,
civil damages, compensatory damages, consequential damages, contingent
damages, continuing damages, double damages, excessive damages,
exemplary damages, general damages, irreparable damages, pecuniary
damages, prospective damages, special damages, speculative damages,
substantial damages, unliquidated damages. But the essentials are (a)
detriment to one by the wrongdoing of another, (b) reparation awarded to
the injured through legal remedies, and (c) its quantum being determined by
the dual components of pecuniary compensation for the loss suffered and
often, not always, a punitive addition as a deterrent-cum-denunciation by
the law. For instance, “exemplary damages” are damages on an increased
scale, awarded to the plaintiff ever and above what will barely compensate
him for his property loss, where the wrong done to him was aggravated by
circumstances of violence, oppression, malice, fraud, or wanton and wicked
conduct on the part of the defendant, and are intended to solace the plaintiff
for mental anguish, laceration of his feelings, shame, degradation, or other
aggravations of the original wrong, or else to punish the defendant for his
11 (1979) 4 SCC 573.
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1-COMIP-26-2007
evil behavior or to make an example of him, for which reason they are also
called “punitive” or “punitory” damages or “vindictive” damages, and
(vulgarly) “smart-money”. [ See Black's Law Dictionary, 4th Edn., pp. 467-
648] It is sufficient for our present purpose to state that the power conferred
to award damages is delimited by the content and contour of the concept
itself and if the Court finds the Commissioner travelling beyond, the blow
will fall. Section 14-B is good for these reasons.” (emphasis supplied)
35. From the decision of the Delhi High Court in the case of Hero Honda
Motors Ltd. v. Assuramji Scooters12, he pointed out that the Court had
observed that the punitive damages are elements of corrective justice and
must be awarded to signal the wrongdoers, and the Court shall not hesitate
while awarding compensatory and punitive damages against blatant
infringements.
36.In light of the above, Mr. Khandekar submitted that the Plaintiff was
entitled to an award of compensatory damages of Rs.1,66,75,000/-, along
with punitive damages of Rs.25,00,000/-, together with interest at 18% p.a.
from the date of the suit, i.e., 8th January 2007. He therefore submitted that
Issue Nos. 4 and 5 ought to be answered in the affirmative.
12 2005 SCC OnLine Del 1275.
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1-COMIP-26-2007
37.Mr. Khandekar, then addressing Issue Nos. 6, 7 and 8, submitted that
Defendant No. 2’s claim to the video rights in the said film rested entirely
upon forged and fabricated documents. He submitted that this was borne
out by Defendant No. 2’s own pleadings, documents and evidence, all of
which were irreconcilably inconsistent and exposed the falsity of
Defendant No. 2’s case. In support of this contention, he adverted to the
following:
I. Assignment by Qamar Films to Showman
38.On 4th February 2002, M/s. Qamar Films executed an Assignment
Agreement whereby it assigned all copyrights in the said film to Showman,
and M/s. Indian Movies, the sole proprietorship concern of Mr. Mahendra
Singh Dhariwal, a Director of Defendant No. 1, who signed the agreement
as the “World Rights Controller” and as a confirming party.
II. Assignment by Showman to Defendant No. 2
39.Thereafter, by an agreement dated 30th May 2002, Showman purportedly
assigned to Defendant No. 2, all video copyrights in the said film, including
the rights of transfer, processing, recording, duplication and copying, for
27
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the territories of India, Nepal, Bhutan and Sikkim. Under Schedule I of the
agreement, the signing amount was only Rs.11,000/-.
III. Public notice issued by Defendant No. 1
40.He submitted that despite the above alleged assignment, on 24 th August
2002, Defendant No. 1 published a public notice in a trade magazine
announcing its intention to acquire the sole, exclusive and perpetual
negative and video rights in the said film from M/s. Qamar Films.
41.Mr. Khandekar submitted that this notice fundamentally undermined the
case of Defendant No. 2 since, if Defendant No. 2 had, infact, acquired the
video rights under the agreement dated 30th May 2002, there was no reason
whatsoever for Defendant No. 1 to publicly announce its intention to
acquire those very rights since the Director of Defendant No. 1, i.e., Mr.
Dhariwal, had himself signed the earlier purported Assignment Agreement
dated 4th February 2002 by which Qamar Films sold the said rights to
Defendant No. 2.
28
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1-COMIP-26-2007
IV. Letter dated 26th August 2002
42.Mr. Khandekar then pointed out that Defendant No. 2 had claimed to have
immediately objected to the aforesaid public notice dated 24th August 2002
by addressing a letter dated 26th August 2002 to Defendant No. 1, asserting
that it had already acquired the Home Video Rights from Showman under
the agreement dated 30th May 2002. He, however, submitted that the
evidence relating to this letter itself demonstrated that it was a fabricated
document since, in cross-examination, the witness of Defendant No. 2, in
answer to Question Nos. 26 to 68, made several damaging admissions,
including that (i) he did not remember whether the alleged office copy had
ever been compared with the original (Answer to Question No. 33); (ii) he
first claimed that the original letter had been misplaced but later changed
his version to state that only the office copy had been misplaced (Answer
to Question No. 37); (iii) although his Affidavit of Evidence stated that the
original letter was misplaced, he could not satisfactorily explain that
statement (Answer to Question No. 38); (iv) initially asserted that an
acknowledgement of receipt by Defendant No. 1 existed, but when called
29
Vaibhav
1-COMIP-26-2007
upon to produce it, admitted that no such acknowledgement was on record
and suggested that it too “must have been misplaced” (Answer to Question
No. 40); (v) could not explain why the letter made no reference to the fact
that Mr. Dhariwal was himself a confirming party to the alleged earlier
transaction (Answer to Question No. 42). Mr. Khandekar thus submitted
that these contradictions completely destroyed the credibility of the alleged
letter.
V. Withdrawal letter dated 28th August 2002
43.Mr. Khandekar then pointed out that Defendant No. 2 had further relied
upon a letter dated 28th August 2002 whereby Mr. Mahendra Dhariwal,
acting through Indian Movies, allegedly informed Defendant No. 2 that the
public notice dated 24th August 2002 had been issued under a bonafide
mistake and should be treated as withdrawn. Mr. Khandekar submitted that
this explanation was wholly implausible, since if Mr. Dhariwal had himself
signed the earlier agreements as the confirming party and World Rights
Controller, there could have been no occasion for Defendant No. 1 to have
30
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1-COMIP-26-2007
mistakenly published a notice proposing to acquire rights which had
allegedly already been assigned.
VI. Assignment dated 28th August 2002
44.He then pointed out that on the very same day, Defendant No. 1 allegedly
executed a fresh Deed of Assignment assigning the video rights in the said
film to Defendant No. 2 for India, Nepal, Bhutan and Sikkim. Mr.
Khandekar submitted that this document was itself plainly fabricated since,
firstly, Defendant No. 2 had adopted a mutually destructive position as to
the source of its title. He pointed out that on the one hand, Defendant No.
2 had claimed to have already acquired complete video rights from
Showman on 30th May 2002; however, on the other hand, he claimed to
have obtained the very same rights once again from Defendant No. 1 under
the deed dated 28th August 2002.
45.He then pointed out that the contradictions in the evidence of Defendant
No. 2 were apparent from the cross-examination, wherein the witness of
Defendant No. 2 had, in answer to Question Nos. 44 to 72, admitted that
(i) Defendant No. 2 already owned the video rights before executing the
31
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1-COMIP-26-2007
deed dated 28th August 2002; (ii) the subsequent assignment was allegedly
executed merely “as a precautionary measure”; (iii) no additional
consideration was allegedly agreed to be paid, notwithstanding Clause 5 of
the deed expressly providing for payment of Rs.7,00,000/-; (iv) he could
not reconcile his oral evidence with the express contractual terms; (v) he
alternated between stating that Defendant No. 2 already owned the video
rights and asserting that Defendant No. 1 possessed those rights; (iii) he
could not explain when or how the rights allegedly reverted from
Defendant No. 2 to Defendant No. 1; (iv) no due diligence whatsoever had
been undertaken before entering into the deed; and (v) although the deed
was allegedly executed only as a precautionary measure, the deed nowhere
records that fact. Mr. Khandekar submitted that these admissions alone
rendered Defendant No. 2’s case wholly untenable.
46.Secondly, he submitted that the Agreement dated 30 th May 2002 itself
suffered from several glaring infirmities; (i) there are no witness signatures
on the execution page; (ii) neither Defendant No. 1 nor Defendant No. 2
affixed its company seal; (iii) the deed is executed on Rs.50/- stamp paper
32
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1-COMIP-26-2007
bearing neither a serial number nor the stamp vendor’s signature; (iv) the
mode of payment of consideration is not disclosed; and (v) the names of
the producers, director and principal cast were all blank in Schedule A, and
even the year of production of the said film was not mentioned.
47.He then pointed out the following inconsistencies which emerged during
cross-examination of Mr. Ajeet Kohli (DW-1), wherein the witness had, in
answer to Question Nos. 6 to 24 and 98 to 101, admitted that (i) he did not
know what rights Qamar Films possessed; (ii) he did not know why Indian
Movies was made a confirming party; (iii) no due diligence had been
conducted before entering into the agreement dated 30th May 2002; (iv) he
could not explain why the Schedule to that agreement bore no numbering;
(v) he could not explain why the Schedule carried no witness signatures
although the agreement itself did; (vi) he admitted that there were no
witnesses to the agreement; (vii) he was unaware where the agreement had
been executed; and (viii) despite stating on oath in his Affidavit of
Evidence that the agreement had been executed in his presence, he
admitted in cross-examination that he had not in fact seen the parties
33
Vaibhav
1-COMIP-26-2007
execute it and attempted to explain away the false statement by saying that
he merely received the signed agreement moments later. Mr. Khandekar
submitted that these admissions further demonstrated that Defendant No.
2’s documentary case was entirely unreliable.
VII. Public notice issued in 2004
48.He then pointed out that on 1st May 2004, nearly two years after its alleged
acquisition of rights, Defendant No. 2 issued public notices in Complete
Cinema and Super Cinema claiming ownership of the Indian video rights
but conspicuously omitted to disclose from whom those rights had been
acquired.
VIII. Alleged payment of Rs.42 lakhs
49.Mr. Khandekar then submitted that according to Defendant No. 2,
Defendant No. 1 subsequently addressed a letter dated 22 nd June 2006
requesting Defendant No. 2 to pay Rs.42,00,000/- to M/s. Prime Focus
Limited towards the alleged assignment and claiming to have made this
payment. He, however, submitted that this transaction only deepened the
inconsistencies and pointed out that during cross-examination, in answer
34
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1-COMIP-26-2007
to Question Nos. 76 to 80 and 135, the witness of Defendant No. 2 had
admitted that (i) Defendant No. 1 merely instructed Defendant No. 2 to pay
Prime Focus because Defendant No. 1 allegedly owed money to that
company; (ii) he could not explain why Defendant No. 2 would pay an
additional Rs.42 lakhs if the assignment of 28th August 2002 had truly been
executed only as a precautionary measure; and (iii) he ultimately admitted
that Defendant No. 2 had paid Defendant No. 1 a total consideration of
Rs.42,11,000/-, comprising Rs.42 lakhs routed through Prime Focus and
the earlier signing amount of Rs.11,000/-. Mr. Khandekar submitted that
this entirely contradicted Defendant No. 2’s earlier explanation that no
additional consideration was payable under the 28 th August 2002
assignment.
IX. Revision of consideration
50.He then pointed out that Defendant Nos. 1 and 2 had also relied upon a
letter agreement dated 29th November 2006 whereby the consideration
under the assignment dated 28th August 2002 was increased from
Rs.7,00,000/- to Rs.42,00,000/-, despite Showman not being a party to this
35
Vaibhav
1-COMIP-26-2007
revision. He, however, pointed out that when questioned about this revision
in answer to Question Nos 73 to 75, the witness of Defendant No. 2 was
unable to offer any explanation beyond stating that it was “as per the
understanding of Defendant No. 1 and the Managing Director of the
Plaintiff”. Mr. Khandekar submitted that no commercial or legal
explanation had been offered for such a drastic revision of consideration
more than four years after the alleged assignment.
51.Mr. Khandekar, therefore, submitted that, on the cumulative effect of the
above evidence, Defendant No. 2 had failed to establish any clear chain of
title to the video rights of the said film. Instead, the documentary record
and the witness’s own admissions demonstrated that Defendant Nos. 1 and
2 had, in collusion with each other, constructed a false and fabricated case
founded upon inconsistent and unreliable documents. He accordingly
submitted that Issue Nos. 6, 7 and 8 ought to be answered in the negative.
52.In light of the above facts and circumstances, it is humbly submitted that
the Suit filed by the Plaintiff ought to succeed, with Defendant No. 1 being
directed to pay the Plaintiff a sum of Rs.1,66,75,000/- as
36
Vaibhav
1-COMIP-26-2007
damages/compensation, together with interest at 18% p.a. The Plaintiff
also ought to be granted the costs of this Suit as well as punitive damages.
The suit filed by Defendant No. 2 ought to be dismissed with costs.
Submissions on behalf of Defendant No. 1:
53.Mr. Dubey, learned Counsel appearing on behalf of Defendant No. 1, at
the outset submitted that the present Suit deserved to be dismissed, as the
Plaintiff did not have any cause of action against Defendant No. 1. He
submitted that, at the time of execution of the Plaintiff’s Assignment
Agreement, the Plaintiff was fully aware that the rights in the said film had
already been assigned to Showman, despite which fact, the Plaintiff had
chosen to execute the said Plaintiff's Assignment Agreement dated 31 st
March 2005.
54.Mr. Dubey further submitted that the Plaintiff and Defendant No. 1 had,
infact, with a view of resolving the disputes between them, executed
Consent Terms. He submitted that under the Consent Terms, Defendant
No. 1 had agreed to provide the requisite cassettes of the said film to the
Plaintiff for an additional consideration of Rs.45,00,000/- towards the
37
Vaibhav
1-COMIP-26-2007
acquisition of the video rights. He submitted that the Plaintiff had failed to
pay this additional consideration.
55.Mr. Dubey then invited my attention to the cross-examination of PW-1,
particularly Question Nos. 16 and 17, wherein he submitted that PW-1 had
admitted on oath that the Plaintiff had created an Escrow Account in
respect of the said amount. He submitted that there was no provision in the
Consent Terms permitting the creation of an Escrow Account or the deposit
of the consideration therein. He further submitted that the Plaintiff had
produced no material whatsoever to establish either the payment of the said
amount to Defendant No. 1 or that the Plaintiff had, infact, deposited the
said amount into the alleged Escrow Account.
56.Mr. Dubey then invited my attention to the answers given by PW-1 to
Question Nos. 20 and 21 in support of his contention that there were
material contradictions in the Plaintiff’s case. He pointed out that, in
response to Question No. 20, PW-1 had denied that any delivery of
Digibeta Master tapes had taken place. He, however, pointed out that in
response to Question No. 21, PW-1 had answered that the delivery had in
38
Vaibhav
1-COMIP-26-2007
fact been rejected on account of poor quality. Mr. Dubey submitted that
this answer amounted to an admission that delivery of the cassettes had
indeed been effected.
57.He further submitted that PW-1, when questioned regarding the alleged
inferior quality of the cassettes and whether the Plaintiff had obtained any
technical report to substantiate such allegation, admitted that no such report
had been obtained or produced on record. Mr. Dubey thus submitted that
the contention regarding the poor quality of the cassettes was merely an
afterthought and was deliberately raised by the Plaintiff to evade the
Plaintiff’s obligation to pay the balance consideration.
58.Mr. Dubey thereafter referred to the answers given by PW-1 to Question
Nos. 28, 29 and 30 and submitted that PW-1 had admitted that the Plaintiff
is a producer who bears the cost of publicity material for the release of the
films and further admitted that, in the present case, such publicity material
had been supplied by Glamour Photolab Pvt. Ltd. on the instructions of
Defendant No. 1. He therefore submitted that Defendant No. 1 had duly
discharged its obligations under the Consent Terms and that the Plaintiff’s
39
Vaibhav
1-COMIP-26-2007
claim of having incurred additional expenditure towards publicity was
wholly misconceived, as this expenditure was never the contractual
responsibility or liability of the Plaintiff.
59.Mr. Dubey then invited my attention to the answers given by PW-1 to
Question Nos. 50 and 51, to point out that PW-1 had admitted (i) that the
total consideration payable under the Plaintiff’s Assignment Agreement
was Rs.42,51,000/- and (ii) that the Plaintiff had not paid the entire
consideration which was due to Defendant No. 1. He then placed reliance
upon the letter dated 15th January 2007, issued by Defendant No. 1 to the
Plaintiff, enclosing a cheque for Rs.9,12,271/- towards the refund of the
amount already paid by the Plaintiff under the Assignment Agreement. He
pointed out that the said letter formed part of Exhibit D-38 in Defendant
No. 1’s compilation of documents. He submitted that Defendant No. 1 had
unequivocally offered to refund the amounts paid by the Plaintiff, a fact
admitted by PW-1 during cross-examination, since PW-1 had specifically
stated that the said cheque was never encashed by the Plaintiff.
40
Vaibhav
1-COMIP-26-2007
60.Mr. Dubey then submitted that Defendant No. 1 had always intended to
assign the rights in the said film only if the Plaintiff was willing to acquire
both the video rights and the audio rights. He submitted that since the
Plaintiff was unwilling to acquire both the audio and video rights,
Defendant No. 1 proceeded to enter into an agreement with Defendant
No.2.
61.He further submitted that it was only in the year 2013 that the Plaintiff
amended the Suit by incorporating prayers for a refund of the consideration
as well as damages. He submitted that the Plaintiff, having elected not to
accept the refund when it was offered, could not now seek inconsistent
reliefs and effectively take a “second bite at the cherry”. He therefore
submitted that the Suit deserved to be dismissed with costs.
62.Mr. Dubey also submitted that the assignment in favour of the Plaintiff was
never an exclusive assignment of rights in the said film, since the rights
had already been assigned first to Showman and thereafter to Defendant
No. 2. He submitted that the Plaintiff, having entered into the Assignment
Agreement with full knowledge of these prior assignments, was estopped
41
Vaibhav
1-COMIP-26-2007
from asserting any rights contrary thereto. He reiterated that, once
Defendant No. 1 had offered to refund the sum of Rs.10,01,000/- paid by
the Plaintiff, which offer was refused by the Plaintiff, the Plaintiff did not
have any surviving cause of action against Defendant No. 1.
Submissions on behalf of Defendant No. 2:
63.Mr. Singh, the Learned Counsel appearing on behalf of Defendant No. 2 at
the outset, submitted that the Plaintiff has sought limited relief against
Defendant No. 2 which pertains to a declaration that the Agreement by
which Defendant No. 2 has acquired the video rights in the said film is
void.
64.He submitted that the Defendant No. 1, being the owner and producer of
the said film, was also a signatory to the Agreement dated 4 th February
2002, by which M/s. Qamar Films assigned all the rights in the said film to
M/s. Showman Exports Pvt. Ltd. He submitted that on 30 th May 2002, M/s.
Showman Exports Pvt. Ltd. assigned all video rights in the said film to
Defendant No. 2 (“Defendant’s Assignment Deed”). He submitted that as
a precaution, Defendant No. 1 executed an Assignment Agreement on 12 th
42
Vaibhav
1-COMIP-26-2007
August 2002, in favour of Defendant No. 2, reconfirming the assignment
to Defendant No. 2.
65.He then submitted that the entire consideration amount pertaining to the
assignment in favour of Defendant No. 2 was paid by Defendant No. 2,
which is evident from the letter dated 29th November 2006, which is
appended at Exhibit “Z”, which mentions that consideration of
Rs.42,00,000/- to Defendant No. 1 was paid by Defendant No. 2, and the
same is acknowledged by Mr. Dhariwal. Mr. Singh thus submitted that the
assignment in favour of Defendant No. 2 was not just prior in point but was
complete, and therefore such assignment cannot be declared as void.
66.Mr. Singh submitted that Defendant No. 1 has admitted that Defendant No.
2 has a better title towards the rights in the said film than the Plaintiff in
paragraph No. 5 of the Written Statement of Defendant No. 1. He also
pointed out from the Affidavit of Mr. Dhariwal, which was appended at
Exhibit “AA” to the Written Statement of Defendant No. 2, that the
assignment in favour of Defendant No. 2 was prior in point of time to the
Plaintiff’s Assignment and was a valid Assignment of which the Plaintiff
43
Vaibhav
1-COMIP-26-2007
was fully aware. He submitted that the Plaintiff's Agreement was void
and/or inconclusive.
67.He also pointed out from the letter dated 12th July 2006, addressed by
Defendant No. 1 to the Plaintiff, which was annexed as Exhibit “X” to the
Written Statement of Defendant No. 2, that the same substantiated the
claim of both the Defendants and the Plaintiff was aware of Defendant No.
2’s prior rights in the said film before signing its own Assignment
Agreement.
68.Mr. Singh lastly submitted from the cross-examination of PW-1 and all the
relevant material on record that the Plaintiff has made out no case for the
grant of relief as to the declaration that the Plaintiff’s Assignment
Agreement is valid and the Defendant No. 2’s Assignment Agreement is
void, and therefore the Suit deserves to be dismissed with costs.
Reasons and Conclusion:
69.Having heard the learned Counsel appearing for the parties and having
considered the pleadings, the oral and documentary evidence on record and
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1-COMIP-26-2007
the authorities relied upon, I proceed to consider the Issues framed as
follows:
Issue Nos. 1 and 2
70.The existence and validity of Plaintiff’s Assignment is not in dispute.
Equally not in dispute is the fact that the Plaintiff had, pursuant to the
assignment in its favour, made payment to Defendant No. 1 of a sum of
Rs.10,01,000/- towards the total agreed consideration of Rs.42,51,000/-.
71.The real dispute is whether Defendant No. 1 was entitled to make such an
assignment and whether the Plaintiff’s Assignment was absolute and
would supersede any right or claim asserted by Defendant No. 2. In my
view, the material on record establishes that the Plaintiff’s Assignment was
entered into upon the representation made by Defendant No. 1, that the
earlier assignment concerning the video rights in the said Film in favour of
Showman Exports (India) Pvt. Ltd. had been cancelled. The Plaintiff has
sufficiently established that, acting upon this representation, the Plaintiff
entered into the Agreement and paid part consideration of Rs.10,01,000/-
thereunder to Defendant No. 1. Importantly, Defendant No. 1 has, at no
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Vaibhav
1-COMIP-26-2007
stage, disputed either the execution of the Agreement dated 31 st March
2005 or the receipt of Rs.10,01,000/- from the Plaintiff.
72.Additionally, I find that even apart from the Plaintiff’s Assignment, there
are significant contemporaneous admissions made by Defendant No. 1
which lend support to the Plaintiff’s case that there is a valid assignment in
favour of the Plaintiff. They are as follows, viz.
I. In the Written Statement filed by Defendant No. 1 in Commercial IP
Suit No. 20 of 2007, Defendant No. 1 has affirmed that the rights in
respect of the said Film were with the present Plaintiff and further
stated that the necessary print/cassette had been delivered to the
Plaintiff.
II. Similarly, in the Affidavit in Reply filed to Notice of Motion No.
752 of 2007, Defendant No. 1 has taken the specific plea that
Showman had no authority to further assign the video rights without
the consent of the producer and, has consequently, questioned the
validity of the rights asserted by Defendant No. 2.
46
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1-COMIP-26-2007
III. The Consent Terms executed between the Plaintiff and Defendant
No. 1 execution of which is admitted (though not filed), expressly
acknowledged and confirmed that the Agreement dated 31 st March
2005 assigning the video copyrights, cable television rights, video-
on-demand rights and allied rights to the Plaintiff was “binding,
valid and subsisting”.
IV. Defendant No. 1 also had, in the said Consent terms, acknowledged
receipt of Rs.10,01,000/- from the Plaintiff and confirmed that the
Plaintiff was the lawful holder of the rights assigned under the
Agreement dated 31st March 2005.
73.The record plainly discloses that Defendant No. 1 has, at different points
in time, taken different and plainly contradictory stands with regard to the
creation of competing rights in favour of the Plaintiff and Defendant No. 2
in respect of the same Film. These stands are clearly mutually inconsistent
and incapable of reconciliation. This, in my view, speaks volumes in
respect of the lack of credibility and commercial dishonesty on the part of
Defendant No. 1.
47
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1-COMIP-26-2007
74.Also, the fact that the Plaintiff was aware that there had previously been an
assignment involving Showman would not, ipso facto, assist Defendant
No. 1 in its contention that the Plaintiff’s Assignment was in any manner
conditional or contingent upon any previous assignment of rights. It is the
Plaintiff’s specific case that Defendant No. 1 had represented to the
Plaintiff that the earlier assignment stood cancelled. The Plaintiff, on this
basis, entered into the Agreement dated 31st March 2005. Aside from the
admissions of Defendant No. 1 noted above, Defendant No. 1 has led no
evidence to establish that the Plaintiff was made aware of, or for that matter
knew of, any subsisting assignment by Defendant No. 1 in favour of
Defendant No. 2 and that such assignment would prevail over the rights
which Defendant No. 1 had assigned to the Plaintiff.
75.For the aforesaid reasons, I am satisfied that the Plaintiff has duly
established the execution of the Agreement dated 31st March 2005 and that
the said Agreement was valid and binding upon Defendant No. 1.
76.Accordingly, Issue Nos. 1 and 2 are answered in the affirmative.
48
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1-COMIP-26-2007
Issue No. 3
77.It is clear that in terms of the Plaintiff’s Assignment, Defendant No. 1 was
required to provide the Plaintiff with Digibeta Master tapes of the said
Film, which were of a quality which could be used for commercial
exploitation. The issue is therefore not whether any Digibeta Master tapes
were physically delivered or handed over to the Plaintiff, but whether
Digibeta tapes of the desired and acceptable quality, which were capable
of commercial exploitation, were handed over to the Plaintiff. In this
regard, the Plaintiff has, in paragraph 28A of the Plaint, specifically
pleaded that Defendant No. 1 failed to provide exploitable-quality Masters
within the stipulated period. Crucially, this positive case of the Plaintiff
has not been specifically traversed by Defendant No. 1 in the Written
Statement. Thus, Defendant No. 1 has, for want of non-traverse, admitted
that the Digibeta tapes of the desired quality were not delivered to the
Plaintiff. The Plaintiff’s reliance upon the decision of the Hon’ble Supreme
Court in Thangam v. Navamani Ammal in support of the contention that
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a general or evasive denial cannot be a substitute for a specific traverse of
a material assertion is apposite.
78.The Plaintiff has also led oral evidence which is consistent with the
Plaintiff’s pleaded case that the Digibeta Tapes were not of the desired
quality suitable for video release. The contemporaneous correspondence
relied upon by the Plaintiff also records that the Digibeta Tapes were not
of the acceptable quality and that fresh Master tapes were required before
the cheques deposited with the advocates of Defendant No. 1 could be
released. In my view the fact that no independent technical report has been
produced by the Plaintiff to support the contention that the Digibeta Tapes
were not of the desired quality does not, in the facts of the present case,
displace the Plaintiff’s evidence. The evidence of PW-1 on this aspect has
not been effectively impeached.
79.Importantly, Defendant No. 1 has led no evidence whatsoever to even
attempt to establish that the Digibeta Master tapes of the desired quality
were delivered to the Plaintiff. There is no technical evidence, delivery
acknowledgement, correspondence, acceptance of the quality of the
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Masters, or any other material that has been produced by Defendant No. 1
in that regard. The only defence which was raised was that the Plaintiff had
raised a grievance concerning the quality of the Digibeta tapes only to
avoid payment of the balance consideration, which is, in my view, equally
unsupported by any evidence. Defendant No. 1 has produced no
contemporaneous demand demonstrating that the balance consideration
had become unconditionally payable despite the failure to furnish Master
Tapes of acceptable quality.
80.I therefore find that, even assuming certain Digibeta tapes were physically
tendered to the Plaintiff, Defendant No. 1 failed to prove that Digibeta
Masters of acceptable and commercially exploitable quality, as
contemplated by the Agreement, were delivered. Issue No. 3 is accordingly
answered in the negative.
Issue No. 4
81.During the course of submissions, learned Counsel appearing for the
Plaintiff expressly stated that the Plaintiff was not pressing its claim for
refund of the sum of Rs.10,01,000/- paid to Defendant No. 1 under the
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Agreement dated 31st March 2005. In view of this statement, it is
unnecessary to adjudicate the Plaintiff’s entitlement to such refund.
82.Issue No. 4 therefore does not survive for determination and is disposed of
as not pressed.
Issue No. 5
83.The answer to Issue Nos. 1 and 2 establishes that Defendant No. 1 had
entered into a binding assignment with the Plaintiff, under which
Defendant No. 1 had also received part consideration. Despite this,
Defendant No. 1 failed to provide the Digibeta Masters of commercially
exploitable quality and, in the same breath, has also claimed to have and
infact supported a competing claim to those very rights video in favour of
Defendant No. 2. For this, the Plaintiff has claimed compensatory damages
quantified at Rs.1,66,75,000/- as set out in the Particulars of Claim, which
is supported by the evidence of PW-1 and PW-2, as well as the
documentary material produced in support thereof. On the other hand,
Defendant No. 1 has not led any evidence. Also, a perusal of the record
shows that there has been no effective cross-examination by Defendant No.
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1 of the Plaintiff’s witnesses on the Plaintiff’s claim for damages and
crucially, the basis on which the damages have been computed.
84.The Plaintiff has led evidence to support the contention that the resultant
loss arises from the Plaintiff’s inability to commercially exploit the video
rights in the said Film, the expenditure incurred in preparation for its
proposed release, and the commercial value associated with the rights
acquired under the Agreement. The Plaintiff’s evidence on these aspects
has substantially and effectively remained unchallenged. The principle that
material evidence which has not been subjected to effective cross-
examination may, in an appropriate case, be accepted by the Court finds
support in the decisions relied upon by the Plaintiff in the case of Arvind
Singh v. State of Maharashtra and Union of India v. Rashid M.H. Jung.
85. Furthermore, it is now well settled, as held in the case of Koninklijke
Philips N.V. v. MAJ (RETD) Sukesh Behl, Mahanagar Gas Ltd. v.
Babulal Uttamchand and Co. and Board of Control for Cricket in India
v. Kochi Cricket Private Limited, that a reasonable assessment of damages
is permissible where the exact computation is rendered difficult by the
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nature of the breach and the evidence that is available. Therefore, just
because in a given case the Plaintiff is unable to prove the precise quantum
of loss or damages with exactitude, that would not, in an appropriate case,
preclude an award of damages where the fact of loss is established and the
available evidence furnishes a reasonable basis for the assessment of
damages.
86.In the present case, I am satisfied that by virtue of the non-delivery of
Digibeta Master Tapes, the Plaintiff would have suffered commercial loss
since the Plaintiff could not exploit the acquired rights in the said Film for
commercial exploitation. The Plaintiff has admittedly paid an amount of
Rs.10,01,000/- towards consideration for those rights and had also
undertaken preparatory steps for the release and exploitation of the said
Film. Towards that end, the Plaintiff had also incurred expenditure upon
publicity material pertaining to the said Film, however, the Plaintiff was
thereafter prevented from exploiting the rights in the manner contemplated
under the Plaintiff’s Assignment because Defendant No. 1 failed to
perform its corresponding obligations of supplying the Digibeta Master
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tapes of the required quality and, infact, permitting the Plaintiff’s rival to
do so.
87.To appreciate the value of the commercial rights in respect of the said Film,
the Consent Terms form a useful yardstick. As already noted, these
Consent Terms, though not filed, are admittedly executed between the
Plaintiff and Defendant No. 1, in which the consideration in respect of the
video rights of the said Film are recorded as being Rs.82,51,000/-, which
is significantly higher than the amount mentioned in the Plaintiff’s
Assignment. Crucially, the figure of Rs.82,51,000/- is the commercial
value that Defendant No. 1 itself placed on the rights. Thus, in my view,
this figure can certainly form the basis of awarding compensatory damages
to the Plaintiff. The Plaintiff made a rational contention that since the
Plaintiff was liable to pay Rs.42,51,000/- under the Assignment and the
Plaintiff had already paid Rs.10,01,000/-, Rs.32,50,000/- remained payable
by the Plaintiff. By deducting the remnant consideration amount from the
admitted value of rights, Rs.50,01,000/- becomes the amount of
‘Expectation Damages’, which Defendant No. 1 was liable to pay, i.e., to
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restore the aggrieved party by placing them in the economic position they
would have been in, if the contract had been performed. Hence this fact can
certainly be taken into account when deciding the Plaintiff’s claim for
damages.
88.The Plaintiff has also, in my view, adequately established that the Plaintiff
had incurred expenditure in preparing for the exploitation and release of
the said Film. The Plaintiff has, in support of this claim, inter alia, relied
upon the receipt issued by Glamour Photo Lab Pvt. Ltd., the invoice issued
by Print Plus and the inlay covers printed for the proposed VCD/DVD
release. The Particulars of Claim specify the amount which has been
expended by the Plaintiff towards publicity of the said film, and the
Plaintiff has satisfactorily established, through the material placed on
record, the expenses incurred by the Plaintiff towards the publicising of the
said film, and thus the Plaintiff is required to be granted damages to that
extent.
89.I also find that the reliance placed by the Plaintiff on the decision in the
case of Bence Graphics International Ltd. v. Fasson U.K. Ltd., in support
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of the contention where the nature and commercial object of the transaction
in question are known to the contracting parties, loss of profit reasonably
contemplated from the proposed commercial exploitation may constitute a
relevant measure of damages. Similarly, the contractual consideration and
surrounding commercial circumstances may also constitute relevant
material in assessing the loss or damages reasonably within the
contemplation of the parties.
90.In my view on the totality of the evidence, led by the Plaintiff especially,
the evidence of PW-1 and PW-2, which has remained largely
unchallenged, the contemporaneous contractual material, the expenses
proved by the Plaintiff and the complete absence of any evidence on behalf
of Defendant No. 1, I am satisfied that the Plaintiff has established a
sufficient evidentiary basis for an award of compensatory damages
quantified at Rs.1,66,75,000/-.
91.In addition to the above, I also find that the Plaintiff has made out a case
for the grant of punitive damages. I say so not because Defendant No. 1
has failed to perform its obligations under the contract but because
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Defendant No. 1 has acted in a manner which clearly shows that Defendant
No. 1 never really intended to and clearly sought to create multiple and
competing rights in respect of the same Film on the basis of false
representations or representations which Defendant No. 1 had no intention
of honouring. In my view, the Plaintiff has adequately established that
Defendant No. 1 (i) represented to the Plaintiff that the earlier assignment
stood cancelled; (ii) entered into the Agreement dated 31st March 2005 and
accepted substantial part consideration thereunder; (iii) subsequently
acknowledged in the Consent Terms that the Plaintiff’s Agreement was
valid, binding and subsisting; (iv) questioned Defendant No. 2’s title on
oath in another proceeding; and (v) thereafter reversed its position and
supported Defendant No. 2’s claim of a prior and superior assignment.
92.Such conduct really amounts to misrepresentation and cheating and
exposes the commercial dishonesty of Defendant No. 1 and therefore must
be met with punitive damages. The Plaintiff has, in support of its claim for
punitive damages, placed reliance upon the decisions in the case of Organo
Chemical Industries v. Union of India and Hero Honda Motors Ltd. v.
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Assuramji Scooters, which inter alia recognise that, in appropriate cases
involving contractual obligations, the Court may order exemplary damages
intended not merely to compensate the aggrieved party but also to act as a
deterrent against the party breaching the contractual obligations. I therefore
find that the Plaintiff would also be entitled to punitive damages quantified
at Rs.25,00,000/-.
93.Issue No. 5 is accordingly answered in the affirmative.
Issue Nos. 6 and 7
94.Defendant No. 2 claims to have a prior and superior title to the video rights
in the said Film. The entire case of Defendant No. 2 rests substantially upon
the chain of transactions commencing with an Agreement dated 4 th
February 2002 between M/s. Qamar Films and Showman, followed by an
Agreement dated 30th May 2002 between Showman and Defendant No. 2,
and a further Deed of Assignment dated 28th August 2002 purportedly
executed by Defendant No. 1 in favour of Defendant No. 2. The burden of
proving this asserted chain of title lies upon Defendant No. 2.
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95.However, the evidence led by Defendant No. 2, reveals various material
inconsistencies with regard to the alleged assignment in favour of
Defendant No. 2. Also, and crucially, the documentary record relied upon
by Defendant No. 2 does not disclose a clear and consistent chain of title.
To compound matters, the answers given in cross-examination by DW2
infact raise grave doubts with regard to the very execution and validity, etc.
of these documents.
96.I am therefore unable to hold that Defendant No. 2 has proved that it
acquired the sole and exclusive video copyrights in the said Film under the
Agreements dated 30th May 2002 and 28th August 2002.
97.Issue Nos. 6 and 7 are accordingly answered in the negative.
Issue No. 8
98.The entire premise on which Defendant No. 2 has challenged the Plaintiff’s
Assignment is that Defendant No. 2 had already acquired an exclusive and
superior title under the earlier assignments. However, for the reasons
recorded in answer to Issue Nos. 6 and 7, Defendant No. 2 has failed to
establish any such valid chain of title. Therefore, Defendant No. 2 has, in
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my view, failed to establish any independent legal right or basis for
declaring the Plaintiff’s Assignment either void or subject to any prior
rights of Defendant No. 2.
99.Issue No. 8 is accordingly answered in the negative.
100. I accordingly pass the following Order:
ORDER
(i) The Suit is therefore decreed in terms of prayer clause ‘(a)’ which
is reproduced above.
(ii) Defendant No. 1 shall pay an amount of Rs.1,66,75000/- as
damages and Rs.25,00,000/- as punitive damages to the Plaintiff.
(iii) Defendant No. 1 shall also pay an amount of Rs.15,00,000/- as
costs of the present proceedings to the Plaintiff.
(iv) If Defendant No. 1 fails to comply with the directions in (ii) and
(iii) above within a period of 8 weeks from today, interest at the
rate of 8% shall apply.
(v) The office shall return the original documents to the Advocate for
the Plaintiff upon the Advocate of the Plaintiff handing over a true
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copy of this Order along with photostat copies of the said
compilation of documents duly certified by them as true copies.
(vi) The Suit is disposed of in the aforesaid terms.
[ARIF S. DOCTOR, J.]
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